Managing flood of foreign funds thanks to reform

Shanghai has had success promoting foreign investment and expanding its pilot Free Trade Zone with much effort put into special management and supervisory systems.

The Shanghai Free Trade Zone, first inaugurated on September 29, 2013, established a foreign-funded business management system and had a policy of reforming areas in which foreign investment was not allowed.

The FTZ has learnt from international investment rules, reduced and canceled restrictions on foreign investment access, simplified access management, and improved openness and transparency.

The registration and approval process to set up a foreign-invested company has been largely streamlined. The processing time was condensed from eight workdays to one, and no documentation is required.

Meanwhile, the number of restrictive measures on the prohibited investment list has been cut from 190 to 45.

By June 2016, a total of 8,696 foreign-invested enterprises had been set up in the FTZ, with contract foreign investment reaching US$110.24 billion and paid-in foreign capital of accumulatively US$22.13 billion being committed to the FTZ.

In 2017, Shanghai FTZ achieved the newly-added actual foreign capital of US$6 billion, which is the highest among all 11 free trade zones throughout the country.

After the release of 54 measures on expanding the opening-up in services and manufacturing industries, Shanghai has implemented more than 2,600 projects as at June 2018.

The opening-up measures have seen significant success in various sectors including financing and leasing, trade, architectural design and construction, international ship management, value-added telecommunications, and travel agencies.

Companies in Shanghai and other cities are also encouraged and supported to "go out" for international investment, mergers and acquisitions through the FTZ.

The FTZ had put 2,043 foreign investment projects on record as at June 2018, in which the value of China's outbound investment hit US$55.62 billion, accounting for 50 percent of the total in the city.

Shanghai has also been actively developing new patterns and extending new functions in trade to form competitive advantages in technology, brand, quality and services.

The city has set up a public service platform for cross-border e-commerce, optimized the operating mechanism, exposed the data interfaces and standards, built public supervision areas and improved their capability to offer public services.

Meanwhile, the city has accelerated the digital transformation of emerging industries in trade and services.

The FTZ has also attracted more than 600 cultural enterprises, and organized more than 40 exhibitions and activities on overseas culture per year on average.

In 2017, Shanghai posted a total value of imports and exports related to cultural services reaching US$4.14 billion to rank first in the country.

In terms of the regulatory system, the government administration has shifted the focus from examination and approval beforehand to supervision during and after the processes.

As an example, the FTZ has deepened the optimization of antitrust working mechanisms, building links among member units and promoting information resource sharing to improve the efficiency and capability of supervision and regulation.

Also, a leading group for industrial security warning was set up in the FTZ, and a warning mechanism was launched covering 12 industries. Its influence can further spread to hundreds of companies in nearly 20 sectors.